QUITO, Ecuador, Aug. 9 (UPI) -- The Ecuadorian government announced it was moving toward nationalizing the oil sector by redesigning contracts with major foreign oil companies.
Ecuadorian President Rafael Correa said his government would press to convert production-sharing contacts with European energy companies into service contracts, which are based on a flat payment.
By taking more control over his oil reserves, Correa could boost the sluggish Ecuadorian economy, which is expected to show 1 percent growth in 2010. It could also push many of the companies doing business there to more lucrative markets, The Wall Street Journal reports.
Ecuador is the smallest member of the Organization of the Petroleum Exporting Countries, producing less 1 percent of the global demand for crude oil.
The move toward nationalization comes as Ecuador reaches an agreement with the U.N. Development Program to protect the Yasuni National Park.
The Yasuni National Park was listed as World Biosphere Reserve in 1989. The estimated 846 million barrels of oil that are believed to be lying beneath the park will be left in place under the U.N. deal, UNDP announced.
A trust fund for Ecuador will hold $3.5 billion as part of an effort to protect the park.